Inflation refers to the rate at which the general price level of goods and services in...

 

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Inflation refers to the rate at which the general price level of goods and services in an economy is rising over time. It is often measured by the consumer price index (CPI), which tracks the prices of a basket of goods and services consumed by households. When inflation occurs, the purchasing power of money decreases, meaning that the same amount of money can buy fewer goods and services than before. Inflation can be caused by a variety of factors, including an increase in the money supply, which can lead to an increase in demand for goods and services without a corresponding increase in supply. Other factors include rising production costs, such as wages and raw materials, or a decrease in the supply of goods and services due to natural disasters or political instability. Central banks and governments often try to manage inflation by implementing monetary and fiscal policies. For example, a central bank might increase interest rates to decrease the money supply, while a government might decrease spending or increase taxes to decrease demand for goods and services. The goal is to keep inflation at a low and stable level, usually around 2% per year, to avoid the negative effects of both high inflation (such as decreased purchasing power) and low inflation (such as decreased economic growth). As a netizen, explain how inflation will impact your daily expenditure and saving plan for next 5 years and 30 years ahead using cash flow diagram. In addition, you can use time value money evaluation method, as tool to justify your explanation. Your report must contain the following (but not limited to): Cash flow diagram with impact explanation for yearly expenditure plan for 5 years Cash flow diagram with impact explanation for yearly expenditure plan for 30 years Saving plan for 5 years using time value money method Saving plan for 30 years using time value money method Propose saving plan strategies or alternatives that can assist you hedge your asset against inflation (you can have multiple strategies, to optimize your saving)- (justification can be done using time value money method) 1. 2. 3. 4. 5. Inflation refers to the rate at which the general price level of goods and services in an economy is rising over time. It is often measured by the consumer price index (CPI), which tracks the prices of a basket of goods and services consumed by households. When inflation occurs, the purchasing power of money decreases, meaning that the same amount of money can buy fewer goods and services than before. Inflation can be caused by a variety of factors, including an increase in the money supply, which can lead to an increase in demand for goods and services without a corresponding increase in supply. Other factors include rising production costs, such as wages and raw materials, or a decrease in the supply of goods and services due to natural disasters or political instability. Central banks and governments often try to manage inflation by implementing monetary and fiscal policies. For example, a central bank might increase interest rates to decrease the money supply, while a government might decrease spending or increase taxes to decrease demand for goods and services. The goal is to keep inflation at a low and stable level, usually around 2% per year, to avoid the negative effects of both high inflation (such as decreased purchasing power) and low inflation (such as decreased economic growth). As a netizen, explain how inflation will impact your daily expenditure and saving plan for next 5 years and 30 years ahead using cash flow diagram. In addition, you can use time value money evaluation method, as tool to justify your explanation. Your report must contain the following (but not limited to): Cash flow diagram with impact explanation for yearly expenditure plan for 5 years Cash flow diagram with impact explanation for yearly expenditure plan for 30 years Saving plan for 5 years using time value money method Saving plan for 30 years using time value money method Propose saving plan strategies or alternatives that can assist you hedge your asset against inflation (you can have multiple strategies, to optimize your saving)- (justification can be done using time value money method) 1. 2. 3. 4. 5.

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Cash Flow Diagram for Yearly Expenditure Plan for 5 Years The following cash flow diagram shows the impact of inflation on my yearly expenditure plan for the next 5 years The current inflation rate is ... View the full answer